Friday 11 October 2013

Jobs for a few of the boys, the sack for hundreds of others


For a very well researched and informative review of the Scarlets story, take a look at Caebrwyn's take (here). The WAO's concerns about the council's exposure to a potential failure of the Scarlets venture should make all councillors sit up and take notice, and as Jacqui notes, the discussion which took place on this warning at the recent Audit Committee meeting has been entirely omitted from the minutes.

What you will also see from Jacqui's post is the very selective nature of the council's approach to what information it is prepared to put into the public domain when it comes to the Parc y Scarlets deal. The decision to publish the proposed refinancing deal described below is beginning to look suspiciously like a PR tactic. 


Compare and contrast this headline from the BBC:

Carmarthenshire council warns hundreds of jobs will go

or this one from the Tivyside Advertiser:

 County council may have to give up playing fields

with a report up for approval by the council's Executive Board next week which recommends a further significant softening of the terms of the financing package extended by the council to the Scarlets back in 2007. The report (here) is a carefully written exercise in self-justification which contains the eye-popping statement that "members need to balance the interests of the taxpayer with that of the club".

The main recommendations of the report are that interest on the club's debt of £2.616 million to the council should be reduced from 7% to 3.5% above base rate (which would currently mean an effective rate of 4%), and that just in case interest rates should soar, the rate would be capped at 10%. 

So if interest rates spiralled and meant disaster for businesses and anyone with a mortgage, the club would be protected from the worst.

The sinking fund, set up to ensure that there would be enough money in the kitty to carry out maintenance work on the facilities leased to the club, was meant to have been receiving annual payments of £125,000 from the club by now, but in 2010 payments were "deferred" (actually "cancelled" would be a more correct term) for three years, and are due to resume again this year, with the payment by the club of £25,000.

The council's officers are proposing that this obligation should be further reduced to just £10,000.

In return, the club will make members of its squad available for any PR activities the council might want to undertake (subject to further negotiation on the number of days they would pose for pictures).

According to the report, the club also offered to reduce the thresholds at which it starts paying rent for the council-owned stadium and facilities (it has not actually paid any to date) in the event that it one day makes a profit.

The report's recommendations appear to let the club off that rather hypothetical hook, leaving the original thresholds in place and therefore deferring the day when the council might actually get some revenue from the venture to an unknown and most likely very distant future date.

Readers will recall that the club treats the stadium as an asset in its accounts and recently made a tidy profit from the sale of a chunk of land on the site, even though it does not pay rent or currently contribute towards the maintenance fund.

The report places the blame for all this not on the council and the officers who originally entered into the deal, but on the economic downturn. The best the council's crystal ball can come up with is a statement that, "the current economic conditions will not last forever, and it is hoped that sometime between now and 2023, the financial climate will improve".

Hundreds of people losing their jobs means hardship for them and their dependents. Thousands of people, in other words. Users of the council's bowling greens, rugby, football and cricket pitches face huge increases in charges or the loss of their sports facilities. Council taxpayers face drastic cuts in services and another painful hike in council tax.

But at least the council is balancing their interests with the interests of the Scarlets, or rather with the interests of its chief executive whose brainwave the whole Parc y Shambles disaster was.

And let's not forget that we'll be able to enjoy the PR photo shoots. 

And finally......

Council watcher anoraks will have spotted that the report was not hidden behind the usual public interest exemption.

Bearing in mind that many much less commercially sensitive matters are kept firmly secret (the pensions tax dodge, the proposed transfer of public loos to community councils, etc.), this is striking. Of one thing we can be sure: it does not herald a new dawn of openness and transparency.

Anyone with any ideas why this piece of heavily laundered linen has been hung out for all and sundry to gawp at should get in touch.




Anonymous said...

Mae'r stori yn neud fi deimlo'm sal yn y stwmog

Anonymous said...

While CCC blame the economic downturn for the Scarlets problems it should be remembered that even before the recession Deloitte suggested that the project faced several financial risks, all of which were ignored by CCC and the club who obviously knew better.

If you go further back and look at the minutes of the Scarlets Project Board (the joint CCC / Scarlets board set up for the stadium project) the then Scarlets Chairman Huw Evans questions in one meeting if the project is really viable. I wonder who persuaded him it was?

Instead of CCC dropping their interest rate, how about the Scarlets take out a loan with somebody else at the more favourable rates they claim they should be entitled to, and repay the loan in full to CCC? That way the public gets its money immediately to spend, for example, on protecting a few hundred low paid jobs.

Anonymous said...

So they intend to reduce the costs for the Scarlets while making everybody else pay more for sports facilities?

Anonymous said...

Meryl Gravell's argues that if you pay peanuts, you get monkeys. If high pay attracts better candidates then why is CCC being managed by egotistic baboons? The best candidates are those skilled professionals who are driven by a sincere desire to contribute to society.

Given the headline, "Carmarthenshire council warns hundreds of jobs will go" and Kevin Madge' suggestion that "... we are faced with making some very difficult and unpopular decisions.” Who do you think the taxpayer would miss? The highly paid baboons or the low paid work horses? Not such a difficult and unpopular decision, is it readers!

Anonymous said...

Exactly annonymous 13.33

Anonymous said...

Might "this heavily laundered linen" be a ploy to deflect the public's focus from the person who stood to gain from what the WAO considers to be unlawful transactions?

Anonymous said...

That is what usually happens when bad news has to be hidden from public gaze.The problem I would think is that it's very difficult to decide which bad news is worse.There is so much.

Jac o' the North, said...

It may be worth remembering vis-a-vis the Scarlets and the stadium that the original reorganisation planned by David Moffett (then chief exec of the WRU) included a merger of Swansea, Neath and Llanelli, with the new 'West' region playing its games at the Morfa (now Liberty) Stadium in Swansea.

The conception of a new stadium in Llanelli therefore may owe more to a desire to thwart Moffett's plan than to any considerations of economic viability. Basically, to strengthen Llanelli's case against merger.

If so, then Parc y Scarlets was never a viable economic proposition, and those involved, both at the club and the county council, knew that from the outset.

Anonymous said...

I believe the new stadium proposal was part of his interview presentation. "I failed in Boston with the PRSA, now see what I could do here" or something like that.
I think Parc Y Shambles has actually achieved being a bigger burden to the people of Carmarthenshire than the PRSA is to the people of Lincolnshire.
The Queen should give him an award...

Anonymous said...

Interesting comment from jac,
Although consider the very probable possibility that the ospreys are kicked out of the liberty by instructions of the premier league (who have already been rumoured to have told Swansea to get sole use of the pitch) and then there's a merger between the Scarlett and ospreys. There will then be a conveniently located stadium practically on the river.

Jac o' the North, said...

Anon 17:16, whence cometh these rumours?

Whatever, bear in mind that the Ospreys region runs (officially) to the other side of Bridgend, and has many supporters in the Valleys resentful of losing their region and unwilling to support Cardiff.

So adding Llanelli to the region and playing at Parc y Scarlets just isn't on. It's too far west and it comes with too much baggage.

Anonymous said...

May be it's now time for a petition to be launched for the CEO to 'stand down' from his post due to loss of public confidence???

Maybe Kev also!

Anonymous said...

Anon 8.20

and half of the Councillors too. Why do we need so many? Come to think of it, why do we need two assistant chief exec.? Start at the top and work down.